Should You Downsize Your Home?
Wow is that a loaded question! It is entirely up to you. This is case where heart and mind collide. I can provide some ‘mind’ reasons to downsize.
1. Have the kids moved out of the house?
Family is the main reason we buy big homes. We want room for mom, dad and Suzie and Billy to have room to grow. But when the kids go away to school or move out of the house hose rooms are empty. They have to be cleaned, heated and cooled with no one in it.
You no longer need a four or five bedroom home. But do you want it? Will Suzie move back…maybe you don’t want Suzie back.
2. Do you want to keep costs down?
Money is a major reason to downsize your home. Big houses are expensive to maintain, to cool, to heat, to insure and costs more in property taxes. With a smaller home, you will save money If you are on a fixed income you need to budget….watch money. There may be no other option.
3. Are you going through a divorce?
One of the most common reasons people downsize is because of divorce. While nobody plans for divorce, it is a common occurrence.
Are there children involved? Do you want to stay in the same area/school or is a fresh start better? Does either of the spouses want to keep the home? Does one need equity out of the home to purchase another property?
4. Do you have a lot of equity in your home?
Money. It comes up again. If your home is paid off, you may be able to sell your home, buy a smaller house in a cheaper area, and still have a sizable amount of money left over. Money for college, retirement, travel…
Make sure you are up to speed on real estate capital gains tax laws. This is one of the best home ownership advantages, you can exclude up to $250,000 in profit if single and $500,000 if married. Study your situation.
5. Are you worn out from taking care of your property?
Big homes require a lot of maintenance. Big yards require mowing, raking, weeding. Maybe you have had enough!
A small home is easier to keep up. Better yet a condo or a townhouse or patio home is even less work. The exterior work is handled by the management company.
Tips For Downsizing Your Home
So you have come to the conclusion that a smaller home is in your best interests. here are some tips for downsizing your home!
- Access your current needs – for example, do you need a formal living room in your next home? Think about a open floor plan.
- De-clutter. Look through your current home. If you have not used it in the last yer chuck it!
- Measure your current furniture and see what will fit and what won’t in your new place.
- Evaluate the storage area in your new home. Revisit the de-clutter idea.